Memtech’s Q1 profits crash 52.9% to $600,000

Telco, consumer electronic sales plummeted.

Memtech International (Memtech) ended Q1 with disappointing numbers, as profit after tax and minority interests plummeted 52.9% YoY to $600,000.

According to a report by OCBC, increased automotive sales was partly offset by a fall in telecommunication and consumer electronic (CE) sales. Revenue for the quarter dipped 1.1% YoY to $33.2m.

Moreover, Memtech declared that one of its major CE customers unexpectedly delayed the start of a project a week before the scheduled launch, amid pressure to slash supplier prices across the board. OCBC posits the customer to be Beats by Dr. Dre, given Apple’s weak operational performance this past quarter.

Memtech asserts the order is now back on track after price regulation, and OCBC remains upbeat that it will come to fruition by the start of 2H16.

Meanwhile, thouch there remains concerns a slowdown in the CE segment this year, automotive segment results will continue to post solid growth.

OCBC expects Memtech to post stronger results YoY in H2 as the new orders get underway, though weak consumer sentiment is anticipated to impact the CE segment in Q2. Further, potential cost-cutting and delays by other customers are still risks for Memtech.